Shares of Caleres (CAL, Financial) experienced a significant drop of 19.94% following the release of its third-quarter financial results which fell short of Wall Street's expectations. The company cited reduced seasonal demand for certain products and ongoing challenges in key markets, including China, as factors contributing to the disappointing performance. Consequently, Caleres has adjusted its full-year EPS guidance downward, indicating that weak sales trends may continue.
Trading at a current price of $26.58, Caleres (CAL, Financial) presents an intriguing investment scenario. Its price-to-earnings (P/E) ratio stands at a low 5.75, suggesting that the stock may be undervalued, especially when compared to the sector's median P/E ratio. However, investors must also weigh the financial warnings indicated by its Altman Z-Score of 2.55, which places the company in the "grey area" of potential financial distress.
Despite these challenges, Caleres (CAL, Financial) has notable strengths, including a high Piotroski F-Score of 8, indicating a healthy financial position, and a Beneish M-Score of -2.49, suggesting that the company is unlikely to be a manipulator. These metrics highlight the potential financial resilience of Caleres in navigating its current challenges.
In terms of valuation, Caleres's price-to-book (P/B) ratio is at 1.54, which is relatively modest. Additionally, Caleres's GF Value, a measure provided by GuruFocus, indicates that the stock is "Fairly Valued" with a GF Value estimate of $26.82. Investors can explore more on the GF Value analysis here.
With a focus on a diversified footwear portfolio through its Famous Footwear and Brand Portfolio segments, Caleres (CAL, Financial) continues to reach various retail channels. However, potential investors should remain vigilant regarding ongoing market challenges and the company's strategic responses to these hurdles.
